Thousands of people are finding themselves unable to make their minimum payment each month on credit cards due to a variety of circumstances, including illness and job loss. When it happens to you, you may feel overwhelmed and unable to decide what to do. The first thing you should realize is this problem is very common and ignoring it won’t make it go away.

Begin by understanding what will happen if you fail to make your payment, or make less than the minimum. You’ll automatically be assessed a late fee that can range from $10-$39. This fee will be added both to your entire balance and to your minimum payment next month. Because you’ve broken your credit agreement, you’ll also most likely be given the default interest rate, which can be as high as 29.99%. Your entire credit card balance may even become due immediately!

Absolutely the first thing you should do when you find yourself unable to make your minimum payment is to contact your creditor. You can try negotiating a lower payment, which is a great place to start. Tell them about your financial circumstances and explain your situation. If you’re having trouble with payments because of a job loss, divorce or illness, make sure you let them know. Many credit card companies have hardship programs that are designed to help people in trouble pay their balance. These programs usually include a lowered monthly payment and could even give you a temporary interest rate drop.

Of course, doing this will have side effects. Your creditor may see you as an increased risk because of your financial hardship and you may be hit with a higher interest rate. Because this is completely within their rights, make sure you understand what could happen when you try to negotiate with your credit card issuer.

Another option for many people is to consult with a credit counselor that they’re familiar with and discuss options for making payments and getting rid of debt. These counselors will take a look at your financial situation and help you understand why you’re having difficulties. They can also help you make plans to pay and give you a payment plan that works for you. If you decide to try a credit counselor, make sure you go with someone that’s reputable. There are many frauds out there because of the current economic climate so check with the Better Business Bureau if you feel uncomfortable.

Above all else, don’t ignore the problem. It will only get worse. Next month’s minimum payment will be even higher, you’ll be charged high late fees and most likely be hit with a high interest rate as penalty. Always start by contacting your creditor. Millions of people are having trouble paying their bills so they’ll most likely be willing to negotiate with you to avoid the account going to collections.

Here are some helpful resources to help you if you’re having trouble making your minimum payments.

Bankrate’s Debt Payoff Calculator
This calculator helps you form a plan to pay off your debt for good. It also demonstrates how much money you actually pay when you maintain a balance on credit cards and how long it takes to pay off debt when you only give the minimum each month.

Better Business Bureau
This website will help you find reputable credit conselors and debt consolidation companies.

How Bi-Weekly Credit Card Payments Save You Money
Find out how making two bi-weekly payments each month to your credit card company can save you hundreds of dollars, even though you’re paying the same amount.

Ways to Lower Your Interest Rate
Learn some tips to get a lower interest rate on a credit card.

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